A couple of weeks ago, a Brazilian friend came to visit me in the U.S. During a casual conversation, he shared what he had been hearing:

“Inflation in the U.S. is really bad. Food prices are shooting up. Coffee and meat from Brazil are way more expensive now. I heard that Trump had to back down and negotiate with Lula because of it.” I stopped him before the story went any further. I go to the grocery store every week. I buy coffee, meat, and everyday essentials. Things are not cheap, but there has been no recent surge in prices that resembles the scope of what he was describing. If anything, the inflation pain was far worse a year or two ago.

This week’s inflation and employment data show how far that narrative had drifted from reality.

What the Inflation Data Actually Shows

The latest Consumer Price Index report showed U.S. inflation slowing to 2.7 percent year over year in November. Core inflation, which excludes food and energy, came in at 2.6 percent.

This represents:

• One of the slowest inflation readings of the year
  
  
• A major improvement from the 8 to 9 percent peak reached in 2022
  
  
• Continued progress toward price stability rather than renewed acceleration
  
  

Prices are still higher than they were several years ago, but the pace of increases has slowed meaningfully. That does not support claims of inflation suddenly worsening again.

What the Labor Market Data Shows

The employment data released this week adds important context.

According to the delayed November jobs report:

• Nonfarm payrolls increased by 64,000, rebounding from a decline of 105,000 in October
  
  
• Job growth was modest but better than expectations
  
  
• The unemployment rate rose to 4.6 percent, higher than expected and the highest level since 2021
  
  
• A broader measure of unemployment rose to 8.7 percent
  
  

This combination matters.

Payroll growth shows that the economy is still creating jobs, but at a slower pace. At the same time, the rising unemployment rate suggests that labor market conditions are loosening after an unusually tight period.

This is not an immediate crisis, but it is a signal worth monitoring.

When inflation slows while unemployment rises, it often indicates:

• Reduced pressure on wages and prices
  
  
• Slowing economic momentum
  
  
• A transition phase in the business cycle rather than a collapse
  
  

That combination calls for awareness and discipline, not panic.

Why Narratives Can Drift From Reality

What stood out in my conversation with my friend was not bad intent, but how confidently a sweeping economic story had taken shape without grounding in current data.

Economic narratives often:

• Travel faster than official statistics
  
  
• Become amplified through political and media ecosystems
  
  
• Persist even after conditions have changed
  
  
• Feel convincing because they align with a broader ideological frame
  
  

That is how people end up making decisions based on stories that no longer match reality.

Why This Matters for Investors and Financial Planning

When narratives take over, investors are more likely to:

• React emotionally to headlines
  
  
• Move in or out of markets at the wrong time
  
  
• Confuse political noise with economic fundamentals
  
  
• Drift away from long-term plans
  
  

Markets move on changes in expectations, not on stories alone. When reality improves faster than sentiment, opportunities emerge. When fundamentals weaken but narratives stay complacent, risks rise.

Right now, the message from the data is balanced:

• Inflation is materially lower than in recent years
  
  
• The economy is cooling, not collapsing
  
  
• Labor markets are softening, which deserves attention
  
  
• This is a moment for caution, not fear
  
  

The Prospera Perspective

This is exactly why financial planning matters.

At Prospera, we do not build portfolios around headlines or short-term narratives.

We focus on:

• Systematic investing
  
  
• Broad diversification
  
  
• Allocation frameworks aligned with life goals
  
  
• Time horizons tied to when capital is actually needed
  
  

Being cautious does not mean being out of the market. It means being properly invested, with an allocation that reflects both opportunity and risk.

Economic data will always evolve. Narratives will always compete for attention. A well-designed financial plan allows you to stay invested, stay disciplined, and avoid letting short-term stories derail long-term decisions.

This is the mindset we apply every day at Prospera, grounded in one idea: 

Plan Your Tranquility.

www.prospera.investments

info@prospera.com

Disclaimer

This material is for educational purposes only and should not be considered financial, investment, tax, or legal advice. Nothing in this post is a recommendation to buy or sell any security, including any company mentioned. Decisions about diversification, stock sales, or portfolio strategy should be made based on your personal circumstances and in consultation with a qualified financial advisor. Past performance does not guarantee future results, and all investments involve risk, including the potential loss of principal.